ECA- Audit work - European Court of Auditors
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Audit work

What does the Court audit?

The Court carries out three different types of audits : financial, compliance and performance audits. These address the three following questions:

  • Do the accounts present fairly, in all material respects, the financial position, results and cash flow for the year, in accordance with the applicable financial reporting framework? (financial audit)
  • Are transactions in all material respects, in compliance with the legal and regulatory frameworks which govern them? (compliance audit)
  • Is the financial management sound, i.e. are the funds used kept to a minimum (economy), are the results achieved with the least possible resources (efficiency) and have objectives been met (effectiveness)? (performance audit)

How does the Court audit?

The Court's audit of the EU accounts is carried out in line with International Standards on Audit (ISA), which are applied by the public and the private sector. Existing international standards on audit do not however cover the kind of compliance audit undertaken by the Court to the same extent. The Court takes an active part in the development of international standards, by standard-setting bodies (International Organization of Supreme Audit Institutions - INTOSAI, International Federation of Accountants - IFAC) alongside national audit institutions.

In order to provide assurance as to whether the payments comply with legal and regulatory frameworks, the Court draws on the results both of its examination of supervisory and control systems, intended to prevent or detect and correct errors of legality and regularity, and of a sample of the transactions (payments) themselves. When systems are tested and found to be reliable, then fewer transactions need to be audited by the Court in order to come to a valid conclusion on their legality and regularity. Other sources, such as the work of other auditors, are also used to support the Court’s conclusions.

In performance audit, the Court uses a variety of audit methodologies to assess management and monitoring systems and information on performance against criteria derived from legislation and the principles of sound financial management.

When selecting which performance audits to carry out, the Court aims to identify audit subjects which are likely to yield high impact in terms of identifying potential improvements in the economy, efficiency and effectiveness of EU spending.